Why Hoteliers Should Know the Living Costs Around the World [Infographic]

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Have you ever had one of those guests that use the same service you offer to anyone else, but it simply won't make them happy? You offer this amazing breakfast buffet with $30 pricing and everyone is happy and satisfied except those guests? Have you ever wondered why? Most of the times, the satisfaction comes from the expectations measured by the price you put on your services. But how can you satisfy all your guests?

To begin with, you should know their lifestyle and the cost of living from where they come from! Because that $30 breakfast could be four times the price of a fancy breakfast for someone from India or it could be almost the same price for a breakfast to someone else coming from Switzerland.

It's really hard to understand all your guests' needs. But the more you know about them, the more you can offer better and more suitable services to them. 

Example

Imagine that you want to set up a special campaign to attract Chinese Millennials to your hotel for a special event such as the Chinese New Year. If your hotel was a regular destination for Chinese travellers to come and enjoy, then you only might need to use some marketing techniques and advertisement to inform them about this special event. But if you have had only a few travellers from China before, you probably need more techniques to grab their attention. Having a special package such as a "free spa" or "breakfast coupons" for those events can easily grab their attention. But how much discount should you consider for your guests in these events?

One way is by knowing the living cost for the place they are coming from. In this infographic that was published on MoveHub, you can see the difference in living costs around the world which was made from the world's largest database of users contributed data about cities and countries worldwide.

Cost of Living Around the World [Infographic]

The consumer price index (CPI) in this map is a relative indicator (to living costs in New York). So, for example, China is listed between 40 and 50 and that means that it is on average 60% (40 vs 100) cheaper. But Japan is either the same or just 10% cheaper than New York (CPI=90). 

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What does it mean for hoteliers?

Well, first of all, knowing how much $100 per night feels like for your guests, could change the way you offer your services to them. And second, as we explained above, knowing the cost of living where your guests live could help you make a better decision for your discount offers or free services especially for special events. 

Now let's explain how you can use this infographic in an example:

Step-by-step example

[fa icon="square-o"] When is the special event?

Let's say it's close to March 20, 2016 (Persian new year) and your hotel is located in Florida.

[fa icon="square-o"] What's your price per room per night?

Based on your neighbors and competitors you can't go higher than $100 per night for that week and you already have had a few loyal Persian customers. All you need to do is to attract them to your hotel once more.

[fa icon="square-o"] What's the CPI of your target guests (using the infographic above)?

A simple look at the infographic above you can see that Iranians' CPI is 30-40 and Florida is about 70-80. This means that on average, people from Iran pay 50% less for living that people in Florida. 

[fa icon="square-o"] What services can you give discounts on?

Let's say that you can give discounts on your breakfast on this special occasion and each breakfast is priced $10. 

[fa icon="square-o"] What should be the final discounted price for your choice of service?

The CPI of your target guests in this example was 40 and your place on average was 80. So it's 50% (40/80) less than your place. So 50% would be a good reference for discounts and therefore you can give away your breakfast in that special week for $5 only to delight your guests. 

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